Sunday, January 31, 2016

PF Feb 2016 - Carbon Tax - Pro Position

Resolved: The United States federal government should adopt a carbon tax.

For part one of this discussion, click here.

Pro Position

Pro asserts the USFG should adopt the carbon tax.  This is a simple and clear position on face. So, in order to win this debate, Pro must be equipped to prove that imposition of the tax will have some over-arching benefit which justifies the cost imposed upon the economy if indeed there is a cost. My approach to the Pro position will be simple and basic.  I will establish the harms in the status quo, provide a solvency mechanism (the tax), and discuss advantages.  I don't want to dive deeply into the politics of global warming as I feel that is another debate for another time. Having said that, I feel there is definitely valid Con arguments requiring Pro to defend carbon taxation in the context of a global problem.  For example, while Pro may claim a USFG mandated carbon tax will reduce GHG emissions Con can argue the overall impact on the global environment may be minimal unless every emission producing nation in the world agrees to similar constraints.  Of course, the US is one of, if not the single largest, producer of GHG emissions as a consequence of its vast and active manufacturing sector, numbers of automobiles, etc. Taylor argues that U.S. leadership will encourage other nations to agree to acts which curtail emissions. Recognizing there is no certainty in such speculation Taylor does note that unilateral action by the U.S. will make a positive impact on the environment which is a certainty. But Taylor goes even further in citing the ethics of emission reduction.

Taylor 2015:
Perhaps the strongest argument for unilateral action—even in lieu of a global commitment—is that ethical considerations demand it. Simply put, one should not harm others, one should not damage the property of others, and one should leave enough for others when taking from common resources. It does not matter if others have imposed the same harm and not been held to account, that others will continue to impose identical harms without being held to account, that the one who harms gains more than is lost by the one who is harmed, or that the harmed party has imposed similar harms on others without being held to account.[21]

Perhaps some conservative PF judges are not swayed by the ethical considerations since the costs of such action are clear and the benefits long term and less certain. But Taylor points out Con arguments against unilateral action are non-unique.

Taylor 2015:
Regardless, a carbon tax does not introduce this issue to the climate policy debate. The United States is already acting unilaterally to reduce greenhouse gas emissions outside of a global agreement. Our political commitment to unilateral action, as noted above, appears to be irrevocable. If the United States is going to act unilaterally, better that it do so at the least cost possible.[21]

Harms & Problems

Greenhouse gas emissions rise to the upper atmosphere and trap heat which normally radiates from the surface of the earth and escape the atmosphere.  As a result, over time, the temperature of the atmosphere has been increasing.  This is no doubt a simplification but it is how most judges would understand the issue.  The rising temperature is having profound effects on the climate including changing weather patterns, an increase in severe storms, warming of the oceans, melting of polar icecaps, and rising sea levels. It is anticipated and has already been demonstrated the impact of these changes in terms of lives, harms to species and costs due to damages, droughts and storms is altering life for millions of people. Unless the nations of the earth take steps to curtail GHG emissions, the impacts will escalate and potentially generate a "runaway" warming effect which would be catastrophic and it may already be too late. For the purposes of this resolution, the certainty of the situation is not disputed (although in some rounds it may be).

Efforts to curtail emissions have been difficult to implement due to our dependency on carbon products for energy.  Policies to force reductions in emissions are politically unpopular because major industries would be forced to either take on expensive mitigation projects or shutdown. Either alternative has significant impact on the nation's economy.

Maron, Toder & Austin (2015):
Businesses, consumers, and governments emit carbon dioxide, methane, nitrous oxide, and other greenhouse gases by burning fossil fuels, making cement, raising cattle, clearing land, and other activities. Those emissions build up in the atmosphere and trap heat, warm the globe, raise sea levels, shift rainfall patterns, boost storm intensity, and increase the risk of sudden climate changes. Rising carbon dioxide concentrations also alter the chemical balance of the oceans, harming coral reefs and other marine life. Greenhouse gas emissions thus create a host of potential economic and environmental threats, including increased property damage from storms, human health risks, reduced agricultural productivity, and ecosystem deterioration.

Besides the political difficulties of implementing a curtailment program is the sheer complexity of the logistics required to identify the sources of emissions, the measurement of the emissions, and the impact of the policy on those sources.

Maron, Toder & Austin 2015:
The challenge for any effort to reduce climate change is that emissions come from millions of sources and activities. For this reason, setting emission limits on individual sources, mandating specific technologies, or establishing other direct regulations will be difficult and needlessly costly. Piecemeal regulations can reduce emissions, but even the best-intentioned approaches under control some sources, over control others, and overlook still others. Moreover, direct regulation does little to reward innovation beyond regulatory minimums.

In the past the federal government has adopted many policies aimed at regulating broad classes of emissions by placing limits which targeted particular industries. These limits have been imposed on both the federal and state levels of government.  This is the so-called command-and-control approach. Carbon taxation is seen as way of controlling emissions by placing a cost on carbon usage and allowing the affected industries to take steps to reduce the cost without mandating actions.

Taylor 2015:
Given that the political choice today is between carbon taxation and command-and-control regulation, conservatives betray their market principles by rejecting the former and, consequently, locking in the latter.28 As University of Chicago economist John Cochrane says to those who believe doing anything about climate change is a waste of money, “Look, if we're going to waste money, let's minimize the damage.” The political decision to address climate change appears irrevocable. Even were that not the case, conservatives should embrace some sort of policy to respond to climate change risks, and a carbon tax, as noted above, is the best policy response. Risks from climate change are real and a policy of ignoring those risks and hoping for the best is inconsistent with risk management practices conservatives embrace in other, nonclimate contexts.[10-11]


While there are many sources and types of GHGs, not limited to CO2, such as methane, flouro-carbons, etc. In the U.S. a tax issue aimed at CO2 could capture 80% of emissions and impact a relatively small number of industries. You are encouraged to look at the Metcalf and Weisbach paper.

Metcalf & Weisbach 2009:
We show that a well-designed carbon tax can capture about 80% of U.S. emissions by taxing only a few thousand taxpayers, and almost 90% with a modest additional cost. We recommend full or partial delegation of rate setting authority to an agency to ensure that rates reflect current information about the costs of carbon emissions and abatement. Adjustments should be made to the income tax to ensure that a carbon tax is revenue neutral and distributionally neutral.

While it is understood that unilateral efforts to mitigate climate change may be futile, we can still claim solvency insofar as the carbon tax is a means to achieve a policy goal aimed at reduction and it meets the expectation of the resolution.

C2ES 2013:
The economic rationale for creating a price on greenhouse gas emissions is multifold. First, it would correct an underlying market failure that has led to increasing concentrations of greenhouse gases in the atmosphere. The burning of fossil fuels and other activities that release greenhouse gases are associated with warming global temperatures and adverse climate impacts. The costs of these impacts, including an increase in extreme and damaging weather events, rising sea levels, loss of biodiversity and other effects, will be borne by society as a whole, including future generations. However, these costs are not currently included in the market prices of goods that emit greenhouse gases, leading to an inefficient use of resources and excessive emissions from a societal perspective (see Box 1 for a discussion). A carbon tax would attempt to include these costs in market prices. Second, use of a market-based policy instrument can achieve greenhouse gas emission reductions at lower cost to regulated sectors than a command-and-control approach, which emphasizes source- and sector-based mandates for particular technologies or processes. As technologies that reduce CO2 emissions during or post-combustion are not yet widely available, the primary way to reduce CO2 emissions is to switch to fuel sources with lower carbon content or reduce consumption of fossil fuels. Use of a market-based policy to establish a common price on greenhouse gas emissions is necessary to provide incentives for a broad range of emission reduction options across firms, households, and activities. Some emission reductions will be achieved by firms as they switch from higher- to lower-carbon fuels and invest in energy-saving technologies. Other reductions will come from consumers, who will respond to higher energy prices by purchasing less energy-intensive goods and changing their behavior in ways that use energy more efficiently. Greenhouse gas pricing policies also provide incentives to develop new technologies, such as carbon capture and geological storage and zero-carbon energy sources, and encourage biological sequestration of greenhouse gas emissions in forestry and agriculture.


The direct advantages to implementing a carbon tax arise from the potentially huge source of new revenue. These funds can be used to offset other taxes, which can help level the burden upon those most affected.

Taylor 2015:
Meeting greenhouse gas emissions targets with a tax rather than with regulation produces revenue that can be used for lump sum rebates54 or to offset tax cuts elsewhere. Suggestions have been made to use those revenues to offset cuts in the corporate income tax, the capital gains tax, personal income taxes, payroll taxes, and sales taxes. If the carbon tax is less economically harmful than the tax it displaces, a revenue neutral carbon tax is worth embracing even if we leave aside the environmental benefits. Although it is unclear whether a carbon tax swap produces net benefits aside from any consideration of environmental benefits,57 the important point is that a revenue neutral carbon tax delivers tax cuts. The implicit taxes imposed by command-and-control regulation do not. Whether those offsetting tax cuts completely offset the economic cost of a carbon tax is less important than the fact that offsetting tax cuts will produce significant economic benefits that command-and-control regulation cannot produce.[15-16]

Morris puts specific numbers on the economic revenues.

Morris 2013:
The proposed carbon tax would raise about $88 billion in the first year and rise to almost $200 billion two decades later, for an undiscounted total of $1.1 trillion in the first decade and $2.7 trillion in revenue over twenty years, according to McKibbin and colleagues (2012).10 Adding in the proposed subsidy reduction of $6 billion per year, this proposal would provide almost $200 billion in deficit reduction in the first ten years and $815 billion in deficit reduction over the first twenty years. In the very long run, emissions will decline enough to reduce annual revenue, so eventually other sources of revenue or spending reductions would be necessary to replace revenue from the carbon tax.

Naturally there are other advantages that can be claimed assuming the researcher can find the required links (I don't think it will be very hard at all) but I leave the details for the ambition debater to discover.  First consider the advantages of shifting away from fossil fuels. It reduces our dependency upon foreign oil which frees us from the ever-changing whims of foreign policy and it ensures alternatives as the major sources of oil are exhausted.

Tax Regression Answers

Many studies looking into the Pros and Cons of carbon tax note it is a regressive tax. This means if the government uses the revenues for government interests like reducing the national debt, funding military expansion or so on, the greatest tax burden will be upon the lower income households and the least burden on higher income households. I am sure Con will be happy to explain why that is and Pro will need to answer the criticism.  Of course, the burden on different income brackets is a question of how the tax law is structured and in particular, how the revenues are applied. One proposal suggests the revenues can be used to reduce the corporate tax rate. At the same time, a portion of the revenues could be returned in the form of rebates aimed at leveling the burden across tax brackets.(Marron & Toder 2013).  Of course, the overall benefits arising from deficit reduction, can mitigate impacts to certain economic sectors or regions.

Hood 2011:
The revenue generated from carbon tax or ETS can be used in various ways. If used to stimulate the economy such as reducing labour or capital taxation (offsetting the dampening macroeconomic effect of energy price rises), there can even be a net positive economic result overall from the introduction of a carbon price (Parry et al., 1999). Because carbon prices are passed through into product prices (electricity, or energy-intensive goods like steel, cement and aluminium), there can also be an interaction with wider policies relating to energy access and affordability, and industrial competitiveness. Carbon pricing  policies are therefore generally coupled with compensating measures for strongly affect industry and low-income households to help them cope better with energy price rises, funded with part of the proceeds from the carbon tax or ETS auction revenues.

Metcalf and Weisbach argue that policy goals should not be adjusted to compensate for the regressive nature of the tax. Instead the emission reduction benefits should be maximized while compensating those most impacted through adjustments in the income tax system.

Metcalf & Weisbach 2009:
Redistributing income or wealth through adjustments to a commodity tax is in general less efficient than redistributing through adjustments to direct taxes on labor or income. Thus, the distributive effects of a carbon tax should be offset through adjustments to the overall tax system (in particular, the income tax) rather than through adjustments to the design of the carbon tax itself. In particular, adjustments to the carbon tax for distributive effects produce the same types of distortions that adjustments to labor income taxes do. For example, progressive taxes reduce work incentives. In addition, adjusting the carbon tax for distributive effects would reduce the environmental benefits of the tax: carbon emissions would not be priced equal to their marginal damages. Therefore, the better approach is to design the carbon tax to best internalize the effects of emissions and to adjust the income or payroll tax for any distributive effects. This reflects the fact that distortions arise from redistribution in the tax code. [513-514]

Scandinavian Results Answer

Some European nations implemented a carbon tax in the early 1990s. Norway was one of the first and so there has been sufficient time to measure the effectiveness of the program in reducing emissions, which is, after all, the primary objective.  Internal studies in Norway state their program has minimal impact on emissions and Con will be sure to point this out. Answers to these studies can be found in the Metcalf & Weisbach paper cited in this essay. Specific to Norway, for example:

Metcalf & Weisbach 2009:
All of the Scandinavian countries adopted carbon taxes in the 1990s. These taxes have narrow bases and do not impose a uniform tax on emissions from the sources that they do cover. Instead, they provide a wide variety of different rates.38 The Norwegian carbon tax covers about 64% of CO2 emissions and 49% of total GHG emissions.39 According to Nicholas Stern, the impact of the tax is weakened by numerous exemptions related to competitiveness concerns.40 Moreover, the tax does not accurately reflect variations in emissions across fuels.


C2ES (2013), Options and considerations for a federal carbon tax, Center for Climate and Energy Solutions, Feb. 2013. accessed, 1/20/2016.

Hood, C. (2011), Managing interactions between carbon pricing and existing energy policies, OECD/IEA, 2013, accessed 1/20/2016,

Marron & Toder

Marron, D, Toder, E, Austin, L (2015), Taxing carbon: what, why and how, Tax Policy Center, accessed 1/20/2016

Morris, AC (2013), Carbon taxes and corporate tax reform, Tax Policy Center, 2013. accessed 1.20.2016

Morris, AC & Mathur, A. (2014), A carbon tax in broader U.S. fiscal reform. Design and distributional issues., Center for Climate and Energy Solutions,

Metcalf, GE & Weisbach, D (2009), The design of a carbon tax, Harvard Environmental Law Review, Vol 33. 2009. accessed 1/20/2016

Taylor, J (2015) The conservative case for a carbon tax, Niskanen Center, Mar 23, 2015, accessed 1/25/2016.

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